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Trump’s Presidency May Change the Way Silicon Valley Works

During the presidential campaign, all Silicon Valley leaders uniformly rejected Donald Trump. Now they’re struggling to come to terms with what his presidency will mean for their industry.

Under the Obama Administration, Silicon Valley became very friendly with Washington and the relationship went both ways. After the end of his term, President Obama would likely stay linked to tech, with much of the work of his charitable presidential foundation tied to the progress of innovations in Silicon Valley.

On the contrary, the reality of a Trump presidency would likely be vastly different for the tech industry. Trump stated that he plans to punish companies that offshore production by placing tariffs on their imports back to the US. Never mind the fact that Trump’s own companies manufacture thousands of items overseas.

“We’re going to get Apple to build their damn computers and things in this country instead of in other countries,” he promised at Liberty University as early as January, a commitment he repeated at other events.

The problem is that, at least in Apple’s case, forcing adherence to this policy would be both logistically impossible and economically disastrous. Forcing Apple to produce the iPhone in the US would make the device too expensive that it would become less competitive with foreign competitors like Samsung.

Apple would have to look for other places to cut down on expenses—including scaling back corporate operations or closing retail locations, which already employ thousands of Americans—jobs at home Trump purportedly hopes to save.

But Trump’s trade policies go beyond the case of Apple. Trump has also criticized both China and Mexico, proposing a blanket 45 percent tax on Chinese imports and 35 percent tax on Mexican imports if the countries do not reform their policies affecting US trade.

“I think the tech industry is going to have to react to this collectively,” says Rob Atkinson, president of the Information Technology and Innovation Foundation. “The question is: are they capable of acting collectively or are they individual firms that just do what’s best for them?”

In addition to imports and offshore outsourcing, much of the work in the Silicon Valley relies upon immigrants. Trump has already expressed his plans to implement stricter laws on immigration so this might be another area of concern for the tech industry.

According to the National Foundation for American Policy, more than half of start-ups in the U.S. that are valued at $1 billion or more—have at least one immigrant founder. The top job at some of tech’s most established companies have immigrants helming the ship, including Microsoft CEO Satya Nadella and Google CEO Sundar Pichai. Foreigners have also filled the middle ranks of many tech companies as well, especially in technical jobs.

Over the past three years, the tech industry has vocally committed itself to the work of diversity. This commitment to diversity may be even more challenging in the era of Trump. His campaign showed an unprecedented willingness to insult pretty much every minority group in the US. This is why tech CEOs is reinforcing their commitment to diversity.

The only tech VIP who has explicitly aligned himself with the new Trump administration is billionaire venture capitalist Peter Thiel, who controversially backed Trump’s candidacy and will reportedly be part of the presidential transition team.